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Has a profitable EURUSD pattern been found?

  • #21
  • Jan 19, 2008 7:50pm Jan 19, 2008 7:50pm
  •  TrevA
  • | Joined Oct 2007 | Status: my brain has a mind of its own | 166 Posts
Quoting Trader KGB
Arb models drive much of the correlation, when they do run in tangent, it's typically synchronous movement (no lag or lead time).

Lately we've been seeing the correlation fall apart. As the Dow was driven to new lows Wed, Thurs, & Fri, USD/JPY never broke its Wed lows and in fact rallied on Friday.

A divergence opportunity perhaps? These rapid moves are often followed by pullback too.

TrevA
  • #22
  • Jan 19, 2008 7:58pm Jan 19, 2008 7:58pm
Quoting Trader KGB
Arb models drive much of the correlation, when they do run in tangent, it's typically synchronous movement (no lag or lead time).

Lately we've been seeing the correlation fall apart. As the Dow was driven to new lows Wed, Thurs, & Fri, USD/JPY never broke its Wed lows and in fact rallied on Friday.
You are right. Prices are too low already and there are a strong area support.
  • #23
  • Jan 19, 2008 8:38pm Jan 19, 2008 8:38pm
Quoting TrevA
A divergence opportunity perhaps?
True. In a stat arb sense, you could buy the Dow futures and short USD/JPY in hopes that the correlation "gap" is corrected. However, it's not a 1:1 ratio even when they are running in synchronous directions. There are so many other factors driving the USD/JPY that it's a risky arb to trade.
  • #24
  • Jan 19, 2008 9:09pm Jan 19, 2008 9:09pm
Quoting Trader KGB
True. In a stat arb sense, you could buy the Dow futures and short USD/JPY in hopes that the correlation "gap" is corrected. However, it's not a 1:1 ratio even when they are running in synchronous directions. There are so many other factors driving the USD/JPY that it's a risky arb to trade.

How about JPY fut. backmonth vs u/j spot ?
  • #25
  • Jan 19, 2008 11:16pm Jan 19, 2008 11:16pm
Quoting bobblong
How about JPY fut. backmonth vs u/j spot ?
Not sure what you mean by this.. The forward yield curve is already factored into the backmonth yen futures, trading that against spot would basically result in a wash.
  • #26
  • Jan 20, 2008 3:58am Jan 20, 2008 3:58am
Quoting M.A.C.Doug
how do you determine direction and entry on EUR/USD from bond futures? or do you mean EUR/JPY Either way, any movement in the futures or equity markets is tracked simultaneously in currency. one does not lead the other or predict what is going to happen next. Can you explain how exaclty you achieve 65+ per day 3 days a week?
I am not looking for a leader or laggard, the major players have systems that respond quicker than I think so it would be pointless to try.
Essentialy my strategy determines my trade, however the equity markets help confirm or deny a trades probability of success, therefore any possible failures are exited prior to loss, and success can have profit targets revised on supporting strength. I will do some research and work out how to put charts up, and show the types of trades I do if you like. (Just don't look for complex systems with my trading. I sell at resistance and buy at support, and trade impulses and cycles) Have been trading EURJPY a little while now, but have no particular favourite, I just look to see what I am in tune with and trade it.
  • #27
  • Jan 22, 2008 7:30am Jan 22, 2008 7:30am
well...let see JPY go to 113.. and pull anothers .


Best Regards,
Marcelo Marques
  • #28
  • Jan 23, 2008 12:15am Jan 23, 2008 12:15am
Quoting Hedonist
Essentialy my strategy determines my trade, however the equity markets help confirm or deny a trades probability of success, Have been trading EURJPY a little while now, but have no particular favourite, I just look to see what I am in tune with and trade it.
Thanks for the reply. I trade E/J almost exclusively and cross reference with DOW and SP500 futures exactly the same way you described. I thought you may have a secret way of picking trades but it seems you just work hard for it like me. All the same, I would still like to see more of your methods so feel free to post some charts and provide more detail. 65 pips 3 days a week is very attractive particularly if your losing days are smaller. I would love to hear more about it
BTC Return This Year: na
  • #29
  • Jan 25, 2008 2:10am Jan 25, 2008 2:10am
Quoting M.A.C.Doug
Thanks for the reply. I trade E/J almost exclusively and cross reference with DOW and SP500 futures exactly the same way you described. I thought you may have a secret way of picking trades but it seems you just work hard for it like me. All the same, I would still like to see more of your methods so feel free to post some charts and provide more detail. 65 pips 3 days a week is very attractive particularly if your losing days are smaller. I would love to hear more about it
Will do my best to try next week. I keep my journal using snag it to import charts and account stuff. So will try and keep a separate copy of just the charts with positions on them and a write up. Can you point me at the bit where it says how to attach charts for dummy's please
  • #30
  • Jan 23, 2009 5:25pm Jan 23, 2009 5:25pm
TrevA please contact me via personal message. I have some thing for you to look at. I can't not send you any message. sorry about off topic posting.
  • #31
  • Jan 23, 2009 5:54pm Jan 23, 2009 5:54pm
Quoting Carrera
This is simple, if DOW goes down, all JPY crosses and USD go down. I DOW goes up, JPY and USD go up.
Not always. I watch the Dow movement in my M5 trading.
The Asian session don't always move like the US session.
When traders takes their money off the Dow, it is not always going into the JPY. When Dow moves down, USD/JPY could be moving UP. Just relying on the Dow is not reliable enough. There are a number of other factors.
  • #32
  • Jan 23, 2009 6:06pm Jan 23, 2009 6:06pm
Dow is the chart above and USD/JPY is the one below
Attached Image
  • #33
  • Last Post: Jan 23, 2009 6:27pm Jan 23, 2009 6:27pm
If you are using the Dow, try to have a news feed. I watch CNBC. This past week, most companies released there Q4 reports. The Dow was just switching to the tune of those losses/profits. After the end of the European session or a bit later, the Dow seems to be moving back UP. Usually it is popped back up by the financials stocks. Is the US GOV. intervening ? Has the Fed use the banks it had bailed out to let the market down in an " orderly manner" ?
Well, using the Dow to trade in short TF has an edge right now. Just don't hold too long time a trade and respect your STOP LOSS !!
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